Politicians' pay rises an annual embarrassment

How much should Members of Parliament be paid – and who decides anyway?
New Zealand Prime Minister John Key has openly disagreed with the recent decision that lifts the basic salary of a backbench Members of Parliament 5.5 per cent, from $147,800 to $156,000, while his own salary rises by $23,800 to $452,500.
So, the Prime Minister still earns less than many chief executives, including many of those in the state sector. But these salary rises are above both inflation and increases in the median income, and they come just after the minimum wage has been raised by a mere 50 cents per hour (3.5 per cent). Public cynicism towards politicians and resentment about inequality have caused a political backlash against the announcements of rises in MPs’ salaries.
For very good reasons, though, MPs’ salaries (and those of judges and elected local government politicians) are set by an independent Remuneration Authority. For obvious reasons, we do not want politicians setting their own salaries. And therefore, for exactly the same reasons, politicians should not interfere in the decisions of the Remuneration Authority, regardless of whether they think an increase is too small  – or in this case, too large.
But Mr Key has told reporters that he wrote to the authority urging it not to give MPs any salary increase at all. He argues that one should not be in politics for the money, and that there is no valid comparison with senior roles such as chief executives.
It is utterly inappropriate for the Prime Minister to attempt to influence the authority’s salary determinations, however. Mr Key is eager to dodge any political bullets that may be aimed at him due to his massive pay-rise. But he should not be trying to influence the authority’s decision, even if his aim is to have no pay increment at all. The point of having the Remuneration Authority is to keep this decision out of the hands of politicians themselves and to distance it from political interests.
For many taxpayers, it might be more satisfactory to give MPs no salary rise, or only one that aligns with average income increments in the economy at large. But the Remuneration Authority employs a widely recognised "job sizing" method, and it is required by law to take into consideration salaries for comparable occupations, fairness to the MPs and to taxpayers, the nature of the job itself, and the state of the economy. To make an informed judgement on the pay-rise determination of the authority, and whether it is reasonable and lawful, we would have to read through the information that the authority had before it.
Parliament could amend the law that governs the Remuneration Authority to more tightly restrict future pay increments. The Prime Minister has hinted at exactly that. One can imagine the interesting debates that would occur in the House over such a Bill. It would amount to political interference again.
Given though that future circumstances are not always foreseeable, it may be unwise to tie the Authority’s hands any more tightly than they are at present. And repealing such an amendment, if it turned out to be impractical, would only add to the political wrangling.
The whole idea of having a Remuneration Authority was to prevent political interference in setting the salaries of elected representatives and judges.
If Mr Key and other MPs feel so strongly about the fact the increases they receive are regularly larger in percentage terms than those received by ordinary New Zealanders, including pensioners, beneficiaries and those on the lowest pay rates, then they might like to consider the means by which that disparity occurs. That would include the National-led government’s recent amendments to employment law, its discouragement of collective wage bargaining, and the decisions Ministers make on pensions, welfare and minimum pay rates.
Until then, if the Remuneration Authority makes a determination that happens to embarrass the Prime Minister, that is just too bad for him. He will have to take the money and smile.

The Big Issues for 2015

Waitangi Day being behind us means that the political 'On' button has been switched to 'Full'. So, here is my pick of the 3 big political issues for 2015:
1. Housing, housing, housing. This means housing supply and affordability (especially in Auckland and Chch), of course. Can government do anything serious at all to get Auckland off the 'world's most unaffordable' list? But, 'housing' also means the Key government’s plan to sell off 'social housing' (aka state houses) to NGOs and iwi. This will make the government a target for the opposition. State housing is ‘close to the heart’ for Labour, and it's a critical factor in getting people out of poverty, ensuring good health and education, etc. But, it's essentially a ‘welfare’ issue for middle NZ. So, Labour will also have to push hard on housing supply and affordability for those on lower to middle incomes who are struggling to own their own homes. The election and leadership change put paid to Labour's capital gains tax policy. Will they stick to the 100,000 homes 'KiwiBuild' policy?
2. Security and identity. Every nation must ask itself how it presents itself, symbolically and militarily, to the world at large. The ANZAC centenary and the first flag-change referendum (in late 2015, to choose from 3 or 4 alternatives) will lead to reflection on national identity. The PM has staked a lot of political capital (and $26million of taxpayers' money) on the two referenda. ANZAC ceremonies have a 'motherhood' tone to them, and not much opportunity for the Opposition to attack Key. So, this is his 'legacy' moment coming up. But it will also lead to debate about NZ at war, meaning normally other people's wars. (As an aside, I'd like us not to forget the centenary also of the Armenian genocide, which happened at the same time.) This links with the question of NZ's participation in the fight against ISIS. Recent diplomatic pressure from the UK shows that NZ’s contribution, while small, has an important political/moral supporting role. And especially with NZ on the UN Security Council at the moment. Opponents of NZ involvement will point to the critical situation that now prevails in Libya, for instance, to question the wisdom of western bombing raids against corrupt regimes. Similarly, they will argue that the US/UK invasion of Iraq in 2003 led to the power vacuum in western Iraq that, in turn, led to the success of ISIS, etc., and hence that further bombardment is futile and puts NZ at risk of retaliation. Why do we keep following the UK and US into futile wars? Key is already pointing to the barbarity of ISIS as his case for war: “We can’t stand by and watch…”. But, we have stood by watched other instances of barbarity… It's a predictable debate, and one on which the Greens will have the strongest running as an opposition.
3. The main political story to watch will be in the polling of the Labour Party and the performance of their new leader, Andrew Little. There have been some early positive opinion-poll results, but nothing to threaten Mr Key so far. Most Labourites are probably just relieved that, so far, Little hasn't stuffed anything up. The Key-Little contest has yet to play out, and punters will be watching them closely as they face off in the House over the coming weeks. It will be a long way back for Labour after their electoral disaster last year, and the next election is a long way off, but steady progress in the polls (at National’s expense) would be what they’re looking for. Good results for Labour, though, could also mean that the Greens (who are losing Russel Norman) stall at the 10% level, or decline, so the potential red–green coalition may be not much better off overall by year's end.